Calif. To Use Cap And Trade To Pay For High-Speed Rail

5:11 PM 06/16/2014 | Business

Michael Bastasch | Energy Editor

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California has passed a massive $156.4 billion state budget that will take revenues from the state’s cap-and-trade program to help pay for the troubled high-speed rail project that has been in the works for decades.

Southern California Public Radio reports some $250 million raised by the state’s cap-and-trade system — that raises revenues from the buying and selling of carbon dioxide permits — will go toward funding California’s high-speed rail project.

The project has been a dream of Democratic Gov. Jerry Brown, who first proposed the idea in the 1980s during his second term as governor. The now $68 billion rail project gained traction again in the 2000s after it was touted as a “job creator” plan by the Obama administration when it was rolling out the 2010 stimulus program.

California’s new budget would also use cap-and-trade revenues to fund green energy projects across the state as well as public transit and public housing. SCPR reports “25 percent of cap-and-trade revenue would go to the rail project, 40 percent will go toward water and energy efficiency programs, natural resource conservation and cleaner transportation, and 35 percent will go for public transit and affordable housing projects that help reduce greenhouse gases.”

The budget was welcomed by environmental activists who want to see more green energy funding in the state to reduce carbon dioxide emissions and fight global warming.

“This budget continues California’s leadership in the fight against climate change,” Ann Notthoff, California advocacy director with the Natural Resources Defense Council said in a statement.

“It invests in cleaning up the single-biggest source of carbon pollution in California — transportation,” Notthoff said. “Investing in transit and sustainable communities is a major down payment on a clean energy future.”

California Republican lawmakers, however, criticized the funding for high-speed rail as it fails to address any of the long-term pension problems facing the state.

“This is a project that is going out of control,” California Republican Rep. Jeff Denham said on the House floor last week. “It’s a project that has no end in sight. We’ve got to stop this train wreck.”

California’s high-speed rail project has already gotten $3.3 billion in federal funding and has continually grown in cost. The project is also not expected to come online until 2030, when it will take passengers from Los Angeles to San Francisco going 200 miles an hour.

The rail project has also gotten another $3 billion from the state, bringing the total funding to about $6 billion — only enough to complete a 130-mile “spine” of the project, reports SCPR.

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